Adani Green Energy Limited cancels USD 600 million bond sale following bribery allegations and legal challenges
Adani Green Energy Limited has postponed its plans to raise USD 600 million bond issue, just a few minutes after the bond was priced, citing ongoing legal developments. "In light of these developments, our subsidiaries have presently decided not to proceed with the proposed USD denominated bond offerings," the company said in a filing.
US prosecutors in New York who claim that Adani and other defendants, including his nephew Sagar Adani, agreed to pay about USD 265 million in bribes to Indian government officials to get lucrative solar energy supply contracts. These contracts were expected to yield USD 2 billion of profit over 20 years.
The US District Court outlined that between 2020 and 2024, senior executives from an Indian renewable energy company, which was part of a major Indian conglomerate, participated in a scheme to bribe officials to ensure the execution of these contracts with Indian government entities.
The allegations also include charges of obstruction of justice, with claims that the group attempted to delete electronic evidence and misleading the Justice Department, Securities and Exchange Commission (SEC) and FBI. As a result, the SEC has filed a separate civil lawsuit against the company.
As a result of these legal troubles, shares of Adani Group companies have fallen significantly, with losses ranging between 10 per cent or 20 per cent.The Adani Green Energy stock fell as much as 19 per cent. Currently, the stock is trading 18.07 per cent lower at Rs 1,157.40 per share on the NSE. On a year-to-date basis, the stock has declined about 28 per cent.
Adani Green Energy Limited planned to reinitiate its US dollar bond offering from its green energy units, Adani Hybrid Energy Jaisalmer and Adani Solar Energy Jaisalmer. The company was planning to launch a USD 600 million bond issue in the upcoming days.
Previously, Adani Green Energy Limited had postponed its USD 1.2 billion bond issuance, a 20-year green bond sale in the last minute in mid-October, which was intended to raise funds for its renewable energy projects.
Adani Group companies have faced significant regulatory and financial challenges in 2023, starting with the allegations of financial misconduct and stock price manipulation in a report by US-based short-seller Hindenburg Research.